Plant Health Care Share Discussion Threads

[geraldus] 20/8/2024 07:20

Announcement pending.

[gb904150] 02/8/2024 15:35

These microcaps come with huge risk and yet when they finally get taken out it is at a minor premium to the share price, a price that has been diluted and destroyed over a period of 20 years.

20 years of fundraises and PI's stumping up more money.

Then, finally when all the work has been done, all the risk has been taken and 99% of value has been lost....that 1% of value turns into......2%!

It's staggering really and makes a complete farce of the idea of investing in small cap shares.

ISTM that PI Industries Ltd. are getting a steal.

One of the few defences that PI's have got in this case is strong institutions or HNW's with large holdings who demand a decent premium.

Yet in this case it just seems like everybody rolled over and was desperate to get their cash out.

The buyout premium for these kinds of mega risk shares should be 4-5x the current share price But that kind of price will only be achieved if shareholders stand their ground.

Just seems an absolute travesty this one.

Didn't help all the BOD promises of breakeven and cash flow positive....followed by yet another placing.

I don't think the BOD ever held much? I suspect that was part of the problem too.

[1pencil] 02/8/2024 14:31

Cerrito by your own admission, why would you vote against something that is in your best financial interest ?

US markets are in dire shape, PHC will likely need more cash to survive without the takeover.

[cerrito] 01/8/2024 08:16

If ,as I hope probably in vain , the takeover is rejected based on Croda H1 results below the share price may well weaken.
Quote


In Crop Protection, sales were down 33% against a strong prior year comparator and were 2% lower than the second half of last year with the absence of a positive inflection in demand. Following an exceptional 2022, when Crop Protection delivered ~50% sales growth, agriculture markets have subsequently seen a prolonged period of destocking compounded by weather and flooding issues in the period, and by stable-but-lower commodity prices. As a result, while some customer inventory levels are now lower than in 2023, we have not yet seen a normalisation in order cycles, however the seasonality of planting cycles provides a further opportunity for improved demand in quarter four. We are focused on innovation and developing sustainable crop care solutions to meet customers' immediate and longer-term needs. Sales were 10% lower in Seed Enhancement, a seasonally second half weighted business, but sales of microplastic-free seed coatings grew strongly reflecting Croda's market-leading position and the EU's decision to ban the use of microplastics in seed coatings by 2028.

[cerrito] 26/7/2024 10:46

After 45 minutes on the phone with Barclays managed to get my no vote registered for me and my wife.
First time I have ever voted on a takeover.

[pretax2] 30/6/2024 21:27

Ditto. Thanks Cerrito.
I don’t think they’ll have a problem getting the deal done.

[geraldus] 30/6/2024 18:42

Thanks for that comprehensive post.

[robsy2] 26/6/2024 14:34

A gain for me but bloody annoying. Take the money and back your other undervalued investments i suppose.

[geraldus] 26/6/2024 12:52

Yes,the best was yet to come. No support and little interest for AIM companies and cheap takeouts discourage investors.Cavendish are backing this,so much for their 42p valuation.

[pretax2] 26/6/2024 12:41

Well there you go.
Probably a loss for most LT holders, but it could be worse.... could be a lot lot better though.

[kaos3] 26/6/2024 12:37

a loss for me.

cheap takeout just before a cash flow starts and all is in place - is a common occurance lately.

i am proud to be a faithfull shareholder for years, helping to build the business and to let others take the cream for the decades to come

takeover is good for business - is a wonderfull argument. and i would add for the employees too

[geraldus] 26/6/2024 12:34

Small profit for me,only because I averaged down recently.Might yet flush out another bidder.

[davemac3] 26/6/2024 12:28

bid, 9p per share. almost gets me back to break even!

[pretax2] 04/6/2024 06:15

Everything primed for a serious rerating it seems.

[robsy2] 03/6/2024 06:35

Interesting posts , I dithered and delayed and finally bought a small holding at 5p, I'd been thinking of pulling the trigger at 3pish but didn't ....

The new research out this morning is quite bullish and suggests that if the market doesn't re rate this then a bidder could come along.

It has been a long road to success but they seem to be within touching distance of being profitable . This feels like a significant moment.

They say


We highlight that approaching profitability is a major milestone as that not only significantly lowers the company’s cost of capital, but it also makes the company a much more attractive acquisition target. With such a profitable and proven biological agribiotech solution, we see Plant Health Care as a high-tech AIM-listed company that is at risk of being taken out before investors can enjoy the returns that are now visible after decades of development and investment.

We see Plant Health Care as an undervalued acquisition target that is trading at a discount to the $30m it has invested in PREtec over a decade. Harpin is now delivering a CAGR of around 20% and the PREtec platform is delivering a pipeline of products with excellent on-ground performance, multi-million dollar high-margin revenues – and this is even before its most exciting product, the biological nematicide PHC949, is launched in Brazil this year. With Plant Health Care forecast to trade profitably within a year from now, we see the company as undervalued and at risk of being acquired by a much larger agritech company. We note that the risk of acquisition increases significantly as a tech company nears or reaches profitability, as this derisks the decision making for the acquirer. For a perspective on valuation, Plant Health Care’s closest listed comparable, Biotalys, is pre-revenue with a €20m cost base and a €96m market cap.

[pretax2] 02/6/2024 22:59

Thanks for your balanced comments Cerrito. There are always risks with small companies and PHC are no different; as you know.
I agree, 25% is not a bad growth rate in normal times… however, with the destocking issue, growth went into reverse last year. So sub 25% growth this year building from a -5% baseline would not be so good, especially with so many new markets and products coming on stream for the company. It would suggest a very lukewarm reception for PHC products.

I look at LinkedIn a lot (we all do) and the PHC field teams have worked tirelessly to promote the new product launches. There have been field trials, adverts, promotions as well as conference presentations. Early indications in 2024 are very positive.
The company have growth milestones which they appear to take very seriously. That’s good, and in recent weeks I’ve started to rediscover my optimism. The shareprice recovery also suggests we’re striding forwards.
All IMO.

[cerrito] 02/6/2024 19:30

No surprise that so much attention being placed on the Going Concern Statement which gives me considerable food for thought.
Great that the base case revenue forecast is for increases of 39pc this year and 55pc for H125. I respect the Board and do not see them as having flights of fancy which explains why in terms of money invested, this is my largest holding. I obviously gain comfort from the experience of YTD with the 72pc increase in sales in the first 4 months of this year.
That said the ramifications of reasonable and plausible scenario of growth sub 25pc are not pleasant. 25pc is a v good growth rate.Yes they do have diversification both by crop and geography. What spooks me is that rightly or wrongly I have got it into my head that it is difficult to predict demand in the crop protection/enhancement market given the economics ,price fluctuations and climate issues, as of course recognized by the Chairman in his statement.Indeed I remember about 8 years ago, Croda saying that of all their divisions, the crop one was the most difficult to predict. The 2023 decrease in third party sales in Mexico due to weather and lower commodity prices illustrate the point.
Despite the Friday RNS,I could not find the AR on the website and look forward to going through it carefully.
I hope there is an IMC and I can make the AGM. We need to get a better handle on the working capital ramifications of a revenue increase of 39pc pa, especially given the swings in the cash position in January this year.
Appreciate any comments if you think I am making a mountain out of a molehill on the risks.

[geraldus] 01/6/2024 14:28

The outlook was of most interest to me and it looks as if this year has seen sales reignited.The destocking issues are in the rear view mirror and it's time for the payback on their $30 million of investment made over the past decade.I think the management have the cash situation covered, backed up with the tremendous opportunity that lies ahead.

[pretax2] 31/5/2024 21:54

The Directors have prepared a base case cash forecast that shows we will be able to operate within our existing facilities (including the financing secured after the year-end) for the foreseeable future of at least a year from the date of the approval of these financial statements. The Directors have modeled a variety of possible cash flow forecasts for the twelve months from the date of the approval of the financial statements.
The Group's revenue projections are based on detailed budgets built up by customer from each of the Group's operating segments, and specifically includes growth assumptions in the U.S. to reverse the decline experienced in 2023. The Group's base case shows a revenue increase of 39% in 2024 and 55% in the first half of 2025, which is an increase from the overall decline in 2023 of 5% (which was caused by the distributors managing their inventory levels in the U.S. market). The base case growth rates projected for 2024 and 2025 are comparable to the 40% and 28% overall growth rates achieved in 2022 and 2021 respectively, and the growth rates achieved in 2023 in the South America and EMEAA regions during 2023 of 29% and 41%.

Experience has shown in the first four months of 2024 that projected revenue has started to occur and growth on 2023 has been achieved at a rate which has exceeded the Directors budget....the Directors consider that the Group and Company will trade in a positive scenario.

[kaos3] 31/5/2024 18:41

all i looked at was the outlook and in it ebitda positive and cash flow positive and profit break

[geraldus] 31/5/2024 16:16

Full year results out .RNS 5.05.

[geraldus] 31/5/2024 07:23

Nothing like legislation to boost sales.That and an unforgiving global climate.